The Chartered Insurance Institute (
CII) is urging the industry to prepare for the impact of increased levels of onshore fracking or risk being caught off guard by future accidents.
According to CII’s newest report, there are no insurance policies that specifically cover hydraulic fracking, which is associated with perils affecting households and businesses such as earthquakes, explosions, fire, pollution, injury and death.
The CII noted that large-scale fracking could soon be rolled out across the UK now that the government is expected to support it at policy level.
“Fracking is not something we can ignore. While current products appear to provide some cover, there are no insurance policies that specifically cover it either,” said Matthew Connell, director of policy and engagement at the CII.
“The profession needs to think ahead around the issues that more extensive fracking could raise so that we don’t have another ash-cloud scenario where the profession is taken by surprise with an unprecedented event affecting policyholders,” Connell added.
The CII has made up three recommendations for insurers:
- The insurance profession needs to remain open and transparent about the risks of fracking by working together to monitor and discuss the issues as one profession.
- The insurance profession, energy industry and government need to work closely together to reduce the likelihood of potential risks occurring.
- Insurers need to be prepared for claims in the event of a fracking-related loss and consider policy wordings with increased fracking in mind.
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